TaxTMI 
TaxTMI 
2025 (12) TMI 1032
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....2021 for AY 2018-19. 2. The sole issue raised in the present appeal is in respect of disallowance made under section 14A r.w.r. 8D of the Income-tax Rules, 1962 (hereinafter referred to as 'the Rules') of Rs. 20,06,2346/- against suomoto disallowance made by the assessee of Rs. 94,147/-. 3. Brief facts relevant to the issue are that assessee filed its return of income on 28.09.2018, reporting total income at Rs. 9,42,42,440/-. Ld. Assessing Officer noted that in the year under consideration, assessee had made investment in equity shares and mutual funds, earning dividend income of Rs. 12,68,000/-, interest on tax free bonds of Rs. 12,080,829/- and capital gain on sale of investment of Rs. 3,09,74,898/-. These incomes were claimed as e....
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....he paper book placed on record, containing 64 pages which has been perused to take note ofthe factual matrix. In respect of expenditure directly related to exempt income which the AO has considered at Rs. 2,41,147/-, the correct factual position placed before us is listed below: Ask Wealth Management Fees - Rs. 8,950/- Performance Fees - Forefront Alternative Equity Scheme - Rs. 2,23,747/- Custodian Charges - Rs. 4,147/- Total - Rs. 2,36,844/- 4.1. In respect of expense payment made to Ask Wealth Management, it was submitted that it relates to investment in debentures from which taxable income is earned. Also, investment in Forefront Alternative Equity Scheme Wealth yields taxable income, therefore, th....
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....claim of assessee is incorrect having regard to the accounts of the assessee for which he has to demonstrate with reasons, why the working made by the assessee for suo moto disallowance is not correct. Thus, satisfaction of the AO as to the incorrect claim made by the assessee is sinequa non for invoking the application of Rule 8D. This satisfaction can be reached only when the claim of the assessee is verified. We have noted already in the above paragraph;ld. AO had made certain incorrect observations while computing direct expenses as well as while taking into account the quantum of exempt income earned during the year. Additionally, assessee had pointed out from its computation of income that expense relating to valuation of shares amoun....
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....rect expense while making suomoto disallowance. Further, from the perusal of the balance sheet, more particularly, Note No. 9 containing Non-current Investment, we note that assessee has made investment of Rs. 17,65,03,064/- in equity shares of Capricon Realty Ltd. which is an unlisted company and sister concern of the assessee. It was submitted before us that since the investment made by the assessee is in the sister concern, no market expertise was required for making the said investment, nor does it require any regular monitoring or reporting. 5. Considering the factual matrix discussed above in detail and taking note of the fact that no satisfaction has been recorded by the ld. AO in terms of section 14A(2) so as to negate the suomot....